At the 28th Conference of the Parties (COP 28) on climate change, held in December 2023, the world witnessed a paradox: a global climate summit hosted by the United Arab Emirates, a nation with the seventh-largest fossil fuel reserves. To add the odd, the Conference was chaired by the CEO of an oil company, namely, the Abu Dhabi National Oil Company (ADNOC). Critics were quick to cry foul, accusing oil executives of trying to steer the conversation away from real climate action. Yet, against all odds, COP 28 shattered expectations. For the first time in history, the conference boldly recognized fossil fuels as a primary driver of climate change, marking a turning point in global climate policy. With a landmark agreement to phase out fossil fuels and transition to net-zero by 2050 in a fair and just manner, the United Nations' climate chief, Simon Stiell, declared this moment as the 'beginning of the end'. Adding to the triumph, COP28 also announced the establishment of a Loss and Damage Fund, with an initial pledge of USD 700 million, to support vulnerable nations like Nepal, bringing a glimmer of hope to those on the frontlines of the climate crisis

As the world rallies behind the Paris Agreement, nations have once again vowed to keep global temperature rise within 1.5 degrees Celsius and gradually phase out fossil fuels to achieve net-zero emissions by 2050. This commitment was underscored by the first-ever Global Stocktaking of the Paris Agreement’s progress, marking a critical milestone in our fight against climate change. To break free from the grip of fossil fuels, the search for sustainable energy alternatives has intensified, with one contender rising to the forefront: Green Hydrogen. Harnessed from renewable energy sources, Green Hydrogen is emerging as a powerful, climate-friendly fuel that could revolutionize industries, transportation, and even household energy use. With its potential to mimic the versatility of fossil fuels while leaving a minimal carbon footprint, Green Hydrogen represents a beacon of hope in the transition to a sustainable future.

However, the path forward is not without hurdles. High production costs, infrastructure needs, market development, and strict safety standards pose significant challenges to its widespread adoption. Yet, advancing Green Hydrogen production has become a key strategy in implementing the COP28 agreement, offering a promising solution to our global energy dilemma. This article delves into the vast opportunities Green Hydrogen presents in the fight against climate change and outlines the critical steps Nepal must take to harness its potential.

The Potential of Green Hydrogen in Nepal

For a country like Nepal, blessed with abundant hydropower potential, converting this energy into Green Hydrogen could be a game-changer, driving the nation's long-awaited economic transformation. Beyond the environmental benefits of achieving zero carbon emissions, this transition could significantly reduce Nepal's dependence on imported petroleum products, conserving valuable foreign currency and helping to address the growing trade deficit—a major hurdle for Nepal's economy.

Nepal's hydropower production, predominantly based on run-of-river systems, often leads to surplus electricity during the monsoon season, much of which goes to waste due to underutilization. Despite this abundance, per capita electricity consumption in Nepal remains the lowest in South Asia, with 2022 figures showing just 325 kilowatt-hours per person, compared to 1,225 kilowatt-hours in India and 500 kilowatt-hours in Bangladesh. According to data from the Nepal Electricity Authority, a staggering 93% of this electricity is used for residential purposes, with only 1.36% going to industry. During the monsoon season, nearly 800 megawatts of excess electricity were wasted, even after exporting some to India.

This unutilized electricity presents a unique opportunity: by converting it into Green Hydrogen, Nepal could store this energy for use during the dry winter months, fuel its industries, or even export it to earn foreign currency. Such a strategy would not only mitigate the trade deficit but also contribute to the stability of the balance of payments. With the Nepalese government's ambitious target of increasing electricity production to 28,000 megawatts by 2035, exploring the diverse applications of available hydropower, including the production of Green Hydrogen, becomes not just an option, but a necessity.

However, realizing this vision is not without its challenges. Green Hydrogen production relies on cutting-edge technology and entails significant costs. Nepal must invest in infrastructure, research, and development to make this energy source viable. Addressing these challenges head-on will be crucial for Nepal to capitalize on the immense opportunities that Green Hydrogen offers.

Production Process and Utilization of Green Hydrogen

Green Hydrogen is produced from renewable energy sources such as solar, wind, and hydropower, with some countries, like India, even exploring its production from biomass. The process, known as electrolysis, involves splitting water into hydrogen and oxygen using electricity, resulting in zero carbon emissions. This versatile energy source can then be converted into synthetic fuels and Green Ammonia, which has wide-ranging applications—from powering transportation systems like ships, trains, buses, and trucks, to producing chemical fertilizers essential for Nepal.

Green Hydrogen's potential doesn't stop there. It can be stored for future use, transported via pipelines or tankers, and utilized across various industries, including steel mills and chemical plants. It can also provide heating, cooling, and even be converted back into electricity. However, a significant challenge lies in minimizing leakage during the conversion process—a hurdle that must be overcome to fully unlock Green Hydrogen's potential.

Global Preparations and Lessons for Nepal

Nepal can draw valuable lessons from its neighbors and other nations that are making significant strides in Green Hydrogen development. India, for example, has launched an ambitious Green Hydrogen Mission, committing ₹19,744 crores by 2029-30 to develop electrolyzer technology and provide subsidies to producers. With 34 companies already vying for these subsidies, India is positioning itself as a leader in the global Green Hydrogen market, aiming to create 600,000 green jobs by 2030.

Bhutan, too, is making strides, having unveiled its Green Hydrogen Roadmap at COP28, with support from the U.S. Department of Energy. Meanwhile, China, with its Green Hydrogen Strategy (2021-2035), is setting ambitious targets to reduce the cost of Green Hydrogen production and increase its use in transportation and heavy industries. The United States, under the Biden-Harris administration, has prioritized Green Hydrogen as part of its "Energy Earthshot" initiative, aiming to reduce costs by 80% and make hydrogen energy more competitive by 2031.

These global efforts underscore the growing momentum towards a hydrogen economy. For Nepal, this represents not just a challenge, but a tremendous opportunity. By leveraging its abundant hydropower resources and drawing on international expertise and technology, Nepal can position itself as a key player in the emerging green energy landscape.

Geopolitical Shifts and the Rise of Green Energy

The global shift towards green energy has the potential to dramatically reshape geopolitical dynamics. Just as the discovery of oil transformed the Gulf countries into economic powerhouses, the promotion of renewable energy could elevate regions rich in natural resources—such as sunshine, wind, and water—to new strategic importance. Countries like Namibia, which is launching a $10 billion Green Hydrogen project in the Namib Desert, are already capitalizing on this trend, turning once-overlooked resources into valuable assets.

Nepal, with its vast hydropower potential, is well-positioned to join this green energy revolution. By harnessing its natural resources and developing a robust Green Hydrogen industry, Nepal can not only contribute to global decarbonization efforts but also drive its own economic growth, creating green jobs, boosting exports, and reducing its trade deficit.

Cost Competitiveness: The Road Ahead

One of the biggest challenges facing Green Hydrogen today is its cost. Currently, producing Green Hydrogen is three times more expensive than producing gray hydrogen, largely due to the high costs of renewable energy and electrolysis technology. However, there is hope on the horizon. Over the past decade, the cost of solar and wind energy has plummeted, and technological advancements are driving down the cost of electrolyzers. By 2030, the price of Green Hydrogen is expected to be on par with blue hydrogen, making it a more viable option for commercial use.

This shift is already underway, with global production of electrolyzers quadrupling between 2022 and 2023. To achieve the global commitment to zero carbon emissions by 2050, 5,700 gigawatts of electrolyzer capacity will be needed—meeting 14% of the world’s energy demand. As costs continue to decrease and production scales up, Green Hydrogen will become increasingly competitive, opening up new markets and opportunities for countries like Nepal.

Green Hydrogen Potential in Nepal: A Strategic Imperative

Nepal is blessed with abundant renewable energy resources, particularly in hydropower, but also in solar, wind, and biomass energy. Despite this potential, renewable energy currently accounts for just 7% of Nepal's energy consumption. To meet its commitment to zero carbon emissions by 2045, Nepal must prioritize the development and use of renewable energy.

As one of the country most vulnerable to climate change, Nepal has a vested interest in harnessing its natural resources to mitigate the impacts of global warming. Green Hydrogen production and trade offer a unique opportunity for Nepal to boost exports, reduce its trade deficit, enhance energy security, and achieve its sustainable development goals.

Recognizing this potential, the Asian Development Bank conducted a feasibility study in 2020 on "hydropower-to-hydrogen" in Nepal. The study highlighted the benefits of converting surplus hydropower into Green Hydrogen, which could be used during dry seasons, stored for later use, or exported. However, despite these promising prospects, investment in this sector has been limited.

For Nepal to realize the full potential of Green Hydrogen, significant preparations are needed. This includes infrastructure development, investment in research and development, and the creation of a supportive legal and institutional framework. By leveraging international cooperation and securing support from neighboring countries like India and China, Nepal can position itself as a leader in the global Green Hydrogen market.

Conclusion and Recommendations: Seizing the Opportunity

COP28 has solidified a global commitment to reducing fossil fuel use and increasing renewable energy adoption. For Nepal, this presents a golden opportunity to achieve zero carbon emissions and drive economic transformation through the strategic use of its abundant hydropower resources.

To capitalize on this opportunity, Nepal must take decisive action. This includes fully operationalizing the Green Hydrogen Policy (2080), establishing a dedicated focal point for Green Hydrogen, and launching pilot projects to build local expertise and lay the groundwork for commercial development. Mobilizing international support through climate diplomacy and encouraging private sector investment will also be crucial.

In conclusion, the time is ripe for Nepal to explore the vast opportunities offered by Green Hydrogen. By embracing this emerging technology, Nepal can drive sustainable development, create green jobs, and play a leading role in the global transition to a net-zero carbon future. The journey ahead is challenging, but the rewards are immense—transforming Nepal's vast hydropower potential into a true boon for the nation and its people.

Twitter: @madhumarasini

(The writer is a Secretary of the Government of Nepal. The views expressed here are his personal)